Refer to the gasoline sales time series data in the given table. Compute four-we

Question

Refer to the gasoline sales time series data in the given table.

Compute four-week and five-week moving averages for the time series. If required, round your answers to two decimal places.

Compute the MSE for the four-week and five-week moving average forecasts. If required, round your intermediate calculations to four decimal places and round your final answers to three decimal places.

MSE for four-week moving average =

MSE for five-week moving average =

What appears to be the best number of weeks of past data (three, four, or five) to use in the moving average computation? Recall that MSE for the three-week moving average is 15.461.

Week Sales (1000s of gallons) 1 17 2 22 3 18 4 24 5 17 6 15 7 21 8 19 9 21 10 21 11 14 12 23

Explanation / Answer

As MSE for the three-week moving average is 15.461.

We can easily conclude that five-week moving average is the best estimate to be used as the MSE is the lowest.

Week Sales 4 Period 5 Period Moving Average Moving Average SE 4 MA SE 5 MA 1 17 2 22 3 18 4 24 5 17 20.25 10.5625 6 15 20.25 19.60 27.5625 21.1600 7 21 18.50 19.20 6.2500 3.2400 8 19 19.25 19.00 0.0625 0.0000 9 21 18.00 19.20 9.0000 3.2400 10 21 19.00 18.60 4.0000 5.7600 11 14 20.50 19.40 42.2500 29.1600 12 23 18.75 19.20 18.0625 14.4400 14.719 11.000 MSE 4 W MA MSE 5 W MA

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